Life insurance helps to secure your family and your own future against uncertainties. Often individuals limit their efforts to identifying the amount of insurance they need, their premium paying capacity, the insurance tenor and, finally, the plan that best fits all these requirements. However, arriving at the correct insurance cover now requires you to do additional homework to identify and consider the right add-ons, also referred to as riders.

Riders are additional benefits that you can add to your policy at nominal costs to enhance the insurance cover both qualitatively and at times quantitatively. They enable you to customise your insurance plan based on your needs and objectives.

The riders available vary across insurers and policies. The rules on how they are applied also vary.

Just as in the case of your insurance premium, the cost incurred on riders depends on the age of the insured, the occupational risk profile, his/her medical health and the type and amount of cover.

Hence, it will be useful to know some of the most popularly offered riders.

Waiver of premium: This rider is often offered to enhance traditional term plans, child plans or unit-linked plans (Ulips). The benefit offered by the waiver of premium rider is immense in the case of the unfortunate and untimely event of death or disability of the primary insured.

This rider enables all future premium of the base plan and attached riders to be waived off through the rest of the policy term in case the primary insured is unable to pay them in the event of financial difficulties arising because of illness or accident.

In some policies, it is also applicable to the proposer if not the life insured. Typically, this waiver expires at the age of 60-70 years.

Critical illness rider: This rider allows the insured to get the complete coverage amount in the event of critical illness. The insurer offers financial support in case the life insured is diagnosed with any of the critical illnesses specified in the rider.

Usually, this rider covers serious illnesses, including cancer, strokes, pulmonary illnesses and other major organ disorders.

This rider is best suited as an addition to traditional term plans so that the insured has a comprehensive health plan in addition to the life cover. Insurers have customised this rider to meet the needs of different customer segments. For example, some insurers offer a critical illness rider particularly designed for women.

Accidental death & dismemberment: This rider covers the life insured in the case of accidental death or disability arising from the loss of limbs or sight or both. The rider provides an additional benefit over and above the policy’s regular death benefit in the case of accidental death and/or disability, thereby securing the family’s financial health in the face of such sudden loss.

An individual’s occupation, lifestyle etc play an important role when the insurer determines the premium for this rider.

Income benefit: In the case of accidental disability or illness, an individual is kept away from work for extended periods of time. There is a strain on family finances as regular income is limited while expenses on medical treatment soar.

The income benefit rider enables adequate financial protection through a percentage of the premium that is received as regular monthly income from the insurer throughout the term of the rider.

Surgical care: If the insured is hospitalised to undergo medically necessary surgery, the surgical care rider enables the insured’s family to remain free from financial worries. When the insured undergoes necessary surgeries, a lump sum benefit is paid by the insurer.

Hospital care: The hospital care rider financially safeguards the family of the insured in case of hospitalisation. It offers a daily cash benefit in the case of hospitalisation for medically necessary treatment of any illness or injury from the first day and for the entire duration of hospitalisation. The benefit amount received varies through different stages of the treatment, including normal hospitalisation, ICU treatment and final recuperation.

It is wise to do adequate homework and research before finalising on a life insurance policy and the riders. There is no ideal formula or combination for riders.

Carefully list your requirements and insurance objectives, review the policy options and benefits and finally discuss this with a well-informed insurance agent to customise a comprehensive plan that meets your needs.

The author is deputy CEO of Birla Sun Life Insurance